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CaHeK987 [17]
3 years ago
12

UBS buy-side analyst Christopher Dixon is following a mature telecommunications company TFI Inc in 2016. UBS estimates 1.5 for T

FI’s beta, risk-free rate equals 5% with equity risk-premium of 8%. Which of the following is closest to the required return on equity? 16% 15% 14% 17%
Business
1 answer:
Pachacha [2.7K]3 years ago
3 0

Answer:

The required return on equity is 17%.

Explanation:

The required rate of return is the minimum return required by the investors to invest in a stock. The required rate of return is calculated under the CAPM approach based on the the stock's beta, the risk free rate and the market risk premium. The formula for the required rate of return is,

r = rRF + beta * rpM

r = 0.05 + 1.5 * 0.08

r = 0.17 or 17%

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Answer:

True

Explanation:

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3 years ago
Fairfax Pizza borrowed 745,000 dollars to build a new restaurant for 745,000 dollars. The decision to spend 745,000 dollars on t
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Financing decision

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You own a house near the beach. Your Home Owners insurance has an annual premium of $1,250. However,since you live only 112 feet
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Answer:

1,437.50

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3 years ago
a. a marketing firm is looking for a candidate with a business degree and at least five years of work experience. multiple choic
Usimov [2.4K]

A. A marketing company is seeking an applicant with a business degree and at least five years of professional experience. An intersection.

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7 0
1 year ago
Following are the average accounts receivable and net sales reported recently by two large bever age companies (dollar amounts a
Vlada [557]

Answer:

A)   Accounts receivable turnover ratio = Net credit sales / Average accounts receivable

The following table shows the accounts receivable turnover ratio of MCB and ABI:

Particulars                                                  MCB          ABI

Net sales                                                 $8320     $17400

Average Accounts Receivable                 $720      $900

Accounts Receivable Turnover rate            11.5                19.3

B)  

Day's sale outstanding  = Accounts receivable / Total credit sales  × 365

The following table shows the days sale outstanding of MCB and ABI:

Particulars                                                    MCB             ABI

Net sales                                                    $8,320           $17,400

Average Accounts Receivable                    $720            $900

Day's sale outstanding                               31.58                 18.88

Explanation:

3 0
3 years ago
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